THERE were lots of things to cheer the heart in Q2 of 2007. It seemed a period of prosperous calm - deal numbers and values were up on the same quarter last year and if there were slightly fewer completions than in Q1 of this year, it may have been due to sheer size.

The £12bn acquisition of Scottish Power by Iberdrola completed this quarter, for example, which kept those productive partners from Shepherd & Wedderburn (Scottish Power side) and Dickson Minto (Iberdrola side) busy. However, no other deals broke the £bn mark this quarter.

Q2 may well be remembered as a mild heyday before things went haywire - but more of that later.

There was a hero of the piece, who led a deal that won the hearts, if not the minds, of those followers of the ongoing Scottish industrial drama. It was a story of secret negotiations in Swiss boardrooms, information leaked by an industrial deep throat and hundreds at risk of losing their livelihoods as well as the multi-millionaire industrialist who rose from humble beginnings as a shop floor apprentice to save the day.

Jim McColl, 55, chairman of Clyde Blowers and estimated to be Scotland's 10th-richest man, doesn't blink at the word 'saviour'. He clearly relishes the story of how he bought Weir Pumps, a small but historically significant part of the larger Weir Group.

Founded in 1873 by Liverpudlian brothers George and James Weir, over the years Weir Pumps established a worldwide reputation for manufacturing giant industrial pumps for a variety of industries.

But in 2006, Weir Pumps accounted for less than eight per cent of revenue and five per cent of group profits.

Weir's CEO Mark Selway deemed a sale of this small division in an unfashionable sector to be in the best interests of his shareholders.

The trouble with this plan is he didn't account for McColl.

Weir had already sold Weir Pumps' historic Cathcart site last year to housing developers Cala for a cool £25m. Plans had been mooted to relocate Weir Pumps to Cambuslang, but if the division was sold this potential headache might be passed on elsewhere.

Instead, a potential buyer had been found in Switzerland-based Sulzer, which operates a global pumps division including a factory in Leeds. It figured it could operate Weir Pumps as a parts and service centre, reducing the number employed there from 600 to 150.

It is likely that the jobs issue was what sparked the whistleblower to go the press.

McColl admits to being surprised when he read the news that Weir was selling its pumps business, having cut his teeth there as an apprentice and later again as a manager.

Being ever the opportunist, it didn't take him long to act.

"As soon as I heard that, I thought if they are open to selling it I want to see if I can get an opportunity here to be part of the process."

McColl wrote to Selway late in February to tell him what Clyde Blowers was all about and to make a formal statement of interest.

However, Selway, appalled that the story had leaked, wasn't interested.

What happened next is a good example of what not to do when you are selling off a chunk of Glasgow's industrial history: don't insult the capabilities of the local would-be hero.

At a press conference in March to discuss Weir's results - healthy pretax profits of £87.1m, 40per cent up on the previous year - Selway implied he didn't take McColl's offer that seriously. He had said that the machinery Weir produced was "sophisticated" and their clients had expectations of the "the right ownership".

According to Selway, Sulzer was the right owner, not McColl. The slight still apparently rankles with McColl, despite the smoothing efforts of Weir's chairman Sir Robert Smith and the fact he has since won the day.

"I thought it was very misleading what Selway said and very patronising,"

says McColl.

This is also what he told the journalist and which duly became the headline the following day.

"We had that experience and also the customers, particularly those in China," says McColl. "We were probably a bigger brand name in China in the power industry than Weir were. And many of the customers were utilities that owned nuclear power plants, coal fired power plants, hydro power plants, a whole range, so we knew some of the customers already."

Smith later described his CEO's comments as "unfortunate". But even if Selway's foot in mouth was calculated to demonstrate his dedication to keeping the negotiations with Sulzer afloat, it didn't work.

Less than a week later, Weir announced that the deal was off and Smith was on the phone to McColl. He wanted to know if McColl was serious and gave him a little avuncular advice - he told McColl don't let your heart rule your head when it comes to buying Weir Pumps.

But McColl was already there.

"He said it with the best intentions, but he didn't need to say it because I was focused as to whether it was a good business or not," says McColl. "And much as it is nice to go back there as the owner, it is not something I would have done if it hadn't been a commercially viable proposition."

Sir Robert's phone call sparked a flurry of activity. McColl had a few days in a locked room to undertake some due diligence. He also drafted in Sulzer's team - KPMG had been working on the deal on behalf of the Swiss. McColl, ever the wheeler dealer, bought Sulzer's due diligence for a knock-down price.

A few weeks later, Sir Robert called again. This time he wanted the deal done and dusted by the AGM in May - giving McColl six weeks from initial overtures to completion.

"That didn't give us much time at all," recalls McColl. "Without working out how I could do it, I said yes.

Then I went away and worked out how we were going to do it. And we did it on 8 May. And he Smith was the first person on the phone to me afterwards to thank me for doing what I said I would do."

It helps that McColl has deep pockets and access to both the pockets and the confidence of his fellow Clyde Blowers directors Alex Stewart, Bill Thomson and Graham Lees. This meant coughing up £45m was the least of his problems.

"In every investment, we all go into it," says McColl, although his share in the Weir Pumps deal was 60 per cent.

He also pulled out all the stops, winning back business that was on the brink of disappearing. Within weeks, what was now Clyde Pumps won a £19.5m contract to supply two Chinese nuclear power stations, with good likelihood of further business.

In addition to China, it is also targeting India, South Africa and the US.

McColl is also considering acquisition opportunities in Spain and Korea.

"When I get out of bed in the morning, I spring out full of excitement because of all the opportunity," says McColl.

Presumably Selway never had this problem when he was thinking about Weir Pumps. The difference in their approaches is that between a company that takes a calculated decision to cut a still profitable business, albeit one that is diminishing, and a hands-on group that can take the business in new directions.

"We have already looked for a plan for the next three years, up to 2011 in fact," says McColl. "Next year we will already grow business by 30 per cent.

"Doubling the size doesn't mean doubling the workforce here. They had stopped producing some of the equipment in Cathcart because they couldn't do it economically. We will revive some of that, but we will do it in a low-cost area.

"We have a different model to what the Weir Group had, we'll be having manufacturing or certainly assembly or packaging facilities close to the markets we will be serving.

But we believe that the growth we think we can get by being competitive in areas that are complimentary - that Weir Group had backed out of - we think that is going to help boost the sales of the things they do here. We are going to keep the workforce busy here."

But Weir Pumps wasn't the only deal of emotional and financial significance in Q2. The largest deal involving a spin-out from a Scottish university occurred when pioneering Edinburgh-based oil and gas technology firm MTEM was acquired by Norway's Petroleum Geo-Services (PGS) for £138m (Û275m).

It was delight all round for the company's founders and shareholders.

Founders Anton Ziolkowski and Bruce Hobbs got £8m each, the University of Edinburgh £9m. The trio of venture capitalists that had backed the company from its early days, Scottish Equity Partners, Energy Ventures and HitecVision, owned 65 per cent of the company for which they paid £7.4m. Their return was almost £90m.

DLA Piper worked closely with the MTEM team from the outset - even before its spin-out from Edinburgh University at the end of 2004.

Yet the downside to the deal was the old chestnut of a promising Scottish technology company sold in a trade sale, taking ownership and control out of Scotland.

"It was funny," says Rae. "The day before we completed I thought the press are going to come to us and say 'another overseas sale'."

MTEM had been in the market for another round of funding. It was considering a private placement, but the opportunity of the PGS buyout came along too, which had to be taken seriously.

MTEM's pioneering electromagnetic survey technology has the potential to allow oil companies to determine whether reservoirs contain oil and gas before they incur drilling costs. It is targeting a global market for geophysical services estimated to be worth over Û1bn. PGS, a world leading geophysical company, provided a broad range of seismic and reservoir services and also possesses the world's most extensive multi-client data library.

"We believe that a combined seismic and EM (electro-magnetic) company will gain a stronger market position than a stand-alone EM player," says MTEM chief executive, Leon Walker. "PGS' experience and size within land and offshore operations, marine rigging expertise, HSE track record, worldwide market organisation, presence and reputation will accelerate the commercialisation of MTEM's technology.

"For MTEM this is a perfect match and we look forward to working with PGS."

"It's still a Scottish company, it's still based here, it's still a success story," says Rae. "The overseas money will take it to the next level."

But as Q2 closed, storm clouds on the financial and public markets threatened to put a chill over the wider financial community. News of the possible collapse of the US subprime industry and the resulting drying up of global debt and credit markets affecting, among others, the Royal Bank of Scotland which was involved in the £9bn of debt underwriting Kohlberg Kravis Roberts' acquisition of Alliance Boots.

While many say these issues are confined to global financial markets, these upsets affect, in the best of circumstances, the confidence required to do further deals.

"Confidence has been shaken slightly," says Rae. "It's being talked about. If the bankers up here talk about it, as a result the lawyers and accountants are talking about it."

For Paul Hally, partner at Shepherd & Wedderburn, Q2 was "fairly busy" as he spent most of the quarter in the court of session ensuring that Iberdrola's scheme of arrangement, a vehicle to allow the transfer of shares from Scottish Power to Iberdrola, went forward smoothly.

He expects there might be a slowdown in activity.

"Across the board in corporate finance and across the firm generally we've seen significant a move forward in terms of activity in Q2.

"I think it is too early yet to judge on Q3, the holiday season is always a difficult one to judge. No doubt there has been a slight market correction.

There is a lot going on, but people are being cautious and things are taking slightly longer.

That reflects cautiousness in due diligence, also perhaps because people are looking at the interest rate hikes and wondering about the subprime markets in the US. That leads to situations where you get different price expectations between buyers and sellers and it takes longer to bridge those gaps.

"There is still a high degree of liquidity - the money is still looking for assets, but there may be a slowdown in completion activity while some of these price expectations work themselves through."

Much as it is nice to go back toWeir as the owner, it is not something I would have done if it hadn't been a commercially viable proposition Jim McColl, Clyde Pumps (pictured above) MTEM is still a Scottish company, it's still based here, it's still a success story.

The overseas money will take it to the next level Simon Rae, DLA Piper (above)